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I am getting some annoying texture issues with the new source engine. Textures will be covered in a checkerboard of black and white pixels and flicker from normal to broken.

I have an Nvidia 6800 with Windows XP, DirextX 9.0c and the latest nVidia beta drivers. The game does not complain that I need to update my drivers.

Anyone have a solution? I tried downgrading every setting in the game but it continues to appear. Windowed and fullscreen too.
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